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House prices forecast to rise 2% in 2013

Renting costs to increase by around 4%

In addition to rising prices, the Royal Institution of Chartered Surveyors (RICS) estimates that the number of transactions will also go up more than 3 per cent to 960,000 (from 930,000 this year). In 2006, total sales were 1.67 million.

Simon Rubinsohn, RICS Chief Economist, said: "These tentative signs of recovery in the sales market should not blind us to the very real problems that still exist. Even with the Funding for Lending scheme and some other government policies beginning to be felt in the mortgage market, many first-time buyers will continue to find it difficult to secure a sufficiently large loan to take an initial step on the housing market.

"Meanwhile, the alternative of renting is becoming more and more costly with a further increase in rents likely in 2013. Critically, the government needs to ensure that the conditions are in place that will enable the stock of new housing, whether for purchase or rent, to rise more rapidly."